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Paulson Will Leave Obama Administration $410 Billion in Bailout Money

Published 11/18/08 Dustin Ensinger - Print Article
E-mail - editor@economyincisis.org

Treasury Secretary Henry Paulson told the Wall Street Journal on Tuesday that he does not intend to spend the remaining $410 billion authorized as part of the $700 billion bailout package because there was not “enough left to make a meaningful impact."

Paulson told the paper that the financial industry is stabilizing and that he would prefer to leave the remaining money in reserve for the Obama administration as it sees fit as well as to cover any other emergencies that may arise.

"I want to preserve the firepower, the flexibility we have now and those that come after us will have," he said.

Paulson was also scheduled to testify before U.S. House Financial Services Committee on the Troubled Asset Relief Program. That was, at times, a contentious hearing after Paulson called an audible on the TARP program and decided to directly inject capital into banks rather than the original plan of buying up bad assets from banks.

Lawmakers seemed to be rather testy about the fact that the bailout is doing very little to help struggling homeowners faced with the prospects of foreclosure. Chairman of the committee, Barney Frank (D-MA) told Paulson that the original intent of the bill to help homeowners “couldn’t have been clearer.”

“The rescue package was not intended to be an economic stimulus or an economic

recovery package,” Paulson replied in testimony, while also pointing out that over $400 billion is left to use at the new administrations discretion.


Source reuters:

The U.S. financial system is stabilizing and the government does not plan to tap the remaining $410 billion of a financial rescue fund unless a further need arises, Treasury Secretary Henry Paulson told the Wall Street Journal in an interview published on Tuesday.

Paulson said he was unlikely to use the remains of the $700 billion bailout to launch substantial new programs, preferring to keep money in reserve for unforeseen emergencies and to preserve flexibility for the Obama administration.

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Article Comments From Readers

guest says "re "not enough"" on 11/19/08
I agree with you on education. In collage I listen to people who think that South America is part of the U.S. and can't figure out how Canada in in America, but not part of America (?!!!?) We need to start teaching other languages in grade school, not high school. We need better math and science classes. Our teachers should be paid more. I read about people arguing over evolution or creationism in schools. Why we are talking about advanced topics that are irrelevant rather than geography and economics I do not know. They need to stop waisting this money on worthless paper (stocks) and put it into industry and education!

guest says "not enough" on 11/18/08
I feel like the country could completely solve every problem with our educational system with $20 billion or less... so I'd say the $410 billion could still make a hell of a difference! Invest that money in teachers and classroom aides and create an economy of the future today (and make the kids take economics in high school, because this is ridiculous)!